Morgan Stanley Initates Coverage On Intuitive Surgical

In a report released Wednesday, Morgan Stanley analyst David Lewis initiates coverage on Intuitive Surgical, Inc.

with a base case of $370. Morgan Stanley previously has an Overweight rating on Intuitive Surgical. Analyst at Morgan Stanley believe Intuitive Surgical's improved procedures will result in a short run investors relief rally but they don't see proof of inflection. Lewis claims Intuitive Surgical's ability to manage stock-comp is out of range compared to its peers. Morgan Stanley is prevented from calling an inflection due to system utilization rates continue to be in negative territory year-over-year, indicating underlying demand for new systems, comps uncertainty from its recovery to decline, and net system payments decline quarter-over-quarter. Morgan Stanley's base case of $370 a share was given by a 25x multiple from its 2015 estimate of $14.78.